Medicare Enrollment Periods
Possibly one of the most confusing things about Medicare is all the enrollment periods. As confusing as they may be, they’re also critically important. Missing one could cause you to be without coverage, or you could even be subject to late enrollment penalties.
Today, we’re going to list all the Medicare enrollment periods you should be aware of. You may not need to utilize all of them, but you should know a little about each one so you can take advantage of them if need be.
Initial Enrollment Period
Your Initial Enrollment Period (IEP) is unique to your birthday month. It begins three full months before the month of your 65th birthday and ends three full months after your birthday month.
For example, if your birthday is on July 2, your IEP runs from April 1 through October 31. As long as you enroll before your birthday month, coverage can begin as early as the first day of the month you turn 65. In this case, your Medicare would take effect on July 1.
This happens with one exception. If your birthday falls on the first day of the month, your IEP begins one month earlier. For instance, if your birthday were on July 1 instead, your IEP would begin on March 1. In addition, your effective date will be bumped to June 1.
During your IEP, you’ll want to enroll in Parts A and B, as well as any other supplemental coverage you may want. This might include a Medicare Supplement plan, a Medicare Advantage plan, or Medicare Part D.
It’s important to plan ahead for your IEP. Missing this Medicare enrollment period might cause you to have a lapse in coverage, and it’s likely you’ll owe late enrollment penalties. The only way to avoid this is to have other creditable coverage in place.
Creditable coverage usually comes in the form of an employer-sponsored group health plan. As long as your employer has at least 20 employees, the health insurance they offer is considered creditable. Having creditable coverage allows you to postpone Medicare enrollment with no penalties. However, be sure to check with your advisor or HR director before you make this decision.
General Enrollment Period
If you do happen to miss your Initial Enrollment Period, you’ll have to wait to enroll in Medicare until the General Enrollment Period (GEP).
The GEP runs every year, starting on January 1 and ending on March 31. During this time, you can enroll in Original Medicare and supplemental coverage. However, if you wish to enroll in a Medicare Supplement plan, you may have to undergo medical underwriting.
Your coverage will begin the month after your enrollment. For example, if you use the GEP to enroll in Medicare and submit your applications in February, your coverage will begin in March. This is a recent change to the Medicare program after the enactment of the BENES Act. In years past, coverage didn’t start until July 1.
Enrolling during the GEP means that you’ll probably be paying late enrollment penalties.
Medigap Open Enrollment Period
Medigap is another name for Medicare Supplement plans. The Medigap Open Enrollment Period begins on your Part B effective date and lasts for six months. It is a one-time election period.
Medigap plans are not mandatory, but they are one way to supplement your coverage under Original Medicare. Most people choose to enroll in either a Medigap plan or a Medicare Advantage plan. While you don’t have to choose Medigap, be aware that once this period passes, you’ll need to be healthy enough to pass medical underwriting to be granted a Medicare Supplement.
Of course, there are exceptions to every rule. If you find yourself outside of this enrollment period but would still like to consider adding a Medigap plan, chat with an advisor at Bobby Brock Insurance.
Special Enrollment Periods
Special Enrollment Periods (SEPs) are reserved for significant life changes. Going through one of these changes will qualify you for an SEP. What you can do during that SEP depends on the circumstance.
Common events that allow for an SEP include getting married or divorced, losing a spouse, losing income, or moving to a new service area. The most common reason people qualify for an SEP is when they continue to work past the age of 65 and are enrolled in creditable insurance.
The second most common reason you’d qualify for an SEP is if you move out of your current plan’s service area. Medicare Advantage and Part D plans operate in service areas using provider networks. If you move outside the area, you’ll have two months to look for a plan in your new location.
There are many reasons you might be able to utilize an SEP, and it doesn’t hurt to ask. Your insurance agent at Bobby Brock Insurance will help you determine if you qualify.
Annual Election Period
Medicare’s Annual Election Period (AEP) is the second-most important enrollment period in Medicare. Every beneficiary should mark their calendars for AEP, regardless of what kind of Medicare plan they currently have.
AEP happens each year, beginning on October 15 and ending on December 7. During AEP, you can make several changes. You may:
- Switch from one Medicare Advantage plan to another
- Switch from one Part D plan to another
- Change from Medicare Advantage to Original Medicare
- Change from Original Medicare to Medicare Advantage
Any changes you make go into effect on January 1 of the upcoming year.
AEP is important because Medicare Advantage and Part D plans operate on annual contracts. While your plan will automatically renew if you do nothing, the plan itself can (and usually does) change each year.
Your plan may change its premium, deductible, cost-sharing amounts, and benefits. You may find that a medication you’ve been taking for years is no longer covered by your plan. Or, you may find a new plan has lower copays than your current plan.
Even if you decide not to make any changes, it’s important to have your plans reviewed during the Annual Election Period. Use the help of Bobby Brock Insurance to stay updated on your plans to ensure you still have the coverage you need.
Medicare Advantage Open Enrollment Period
Ready for the last one? This one is pretty simple. The Medicare Advantage Open Enrollment Period is an annual period that runs from January 1 through March 31.
Only beneficiaries who are already enrolled in Medicare Advantage may use this enrollment period. During this time, you may make a one-time change to your Medicare Advantage plan or switch back to Original Medicare.
If you decide to change your plan, the new plan goes into effect on the first day of the following month. If you decide to switch back to Original Medicare, you may also use this time to choose a Part D plan.
Late Enrollment Penalties
We mentioned some late enrollment penalties earlier. It’s time to talk about what those are so you can see the benefit of not delaying your Medicare enrollment.
Part B Late Enrollment Penalty
For every 12-month period you delay your Part B enrollment, you’ll incur a 10% penalty. An additional 10% of the standard monthly premium will be added to your Part B premium. So, if you delayed for two years, you’d pay an extra 20% per month. The penalty remains for as long as you have Part B.
Part D Late Enrollment Penalty
The Part D penalty is based on the number of full months you went without coverage. And yes, you even get a penalty if you aren’t taking any medications. This is why we see the Part D penalty so often. People assume that if they aren’t taking medications, they don’t need to apply for prescription drug coverage. Not to worry, if you don’t need drug coverage, there are low-cost Part D plans you can enroll in to avoid the penalty.
The Part D penalty is calculated by taking 1% of the national base beneficiary premium and multiplying it by the number of months you went without coverage. The base premium changes each year, so your penalty will, too. As with the Part B penalty, the Part D penalty also lasts for as long as you are enrolled in a Part D plan.
Don’t wait until the last minute to start enrolling in Medicare. If your 65th birthday is a year or two away, now is a great time to start planning. Learn more about Medicare enrollment and plan options by talking with an expert at Bobby Brock Insurance today.
